Sri Lankan shares close at 3-wk low on flood woes

Reuters Staff

COLOMBO May 24 (Reuters) - Sri Lankan shares fell for the
third straight session on Tuesday to a 3-week closing low, led
down by large caps and stocks likely to be hit by the country's
worst natural disaster since the 2004 Asia tsunami.

The benchmark stock index fell 0.95 percent, or 62.69
points, to 6,570.58, its lowest close since May 4.

The index fell 1.12 percent last week, its first weekly fall
in seven weeks.

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On Monday, the government said the cost of landslides and
floods will be between $1.5 billion and $2 billion at the
minimum, as it struggles to recover from days of torrential
rains that have so far claimed the lives of 94 people.

"Flood situation was the main reason for the drag down.
People have started to realise the real impact and going forward
more negativity should come into the market," said Yohan
Samarakkody, head of research, SC Securities (Pvt) Ltd.

Lion Brewery Plc dropped 4.76 percent on Tuesday,
after the alcoholic beverages manufacturer said last week it had
halted production in its main factory in a Colombo suburb due to
the floods.

It fell 3.45 percent on Monday.

Stockbrokers said manufacturing and banking sectors are
likely to be hit due to the low employee turnout during the
floods.

Concerns over a government move to increase the value added
tax and impose new taxes effective May 2, which could hit the
bottom line of many companies, also dented sentiment.

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Turnover was 762.9 million rupees ($5.23 million), in line
with this year's daily average of around 796.1 million rupees.

Foreign investors, who have net sold 4.26 billion rupees
worth equities so far this year, were net buyers of 44.8 million
rupees worth of shares on Tuesday.